Continental also thirsty for cutbacks
One of the latest ways airlines are cutting back: Continental is reducing the amount of drinkable water and magazines on its flights. And planes are switching to a lighter, more durable life vest.
The airline said changing the heavier life vests alone will lead to an annual savings of $2 million when the switch is complete, according to the Cleveland Plain Dealer.
Like other airlines, Continental has blamed soaring fuel costs and a shaky US economy for sending it into the red.
Many airline customers have begun to wonder aloud why airlines don’t just raise fares instead of pushing though unpopular fees for items like checked baggage.
American CEO Gerard Arpey explained that attempts to raise fares enough to offset fuel costs has run into the “hard realities” of a weakening US economy and competitive market, according to MarketWatch.com.
In response, Mr Arpey says AA has had to look at adding new fees that are in addition to its base airfare charges.
“In a sluggish economy, consumers are even more sensitive to price, and when we raise fares we inevitably motivate some would-be travelers to just stay home,” he said in a letter to employees.
Mr Arpey added that if AA raises fares and rivals don’t match them, then the carrier has to retreat from the fare hike or risk losing price sensitive customers to rivals. He said:
“The truth is even a small difference in price almost always costs us more revenue in lost customers than we can gain by charging the higher fare. … The goal is to wring as much revenue as we can out of every seat — and an empty seat obviously generates no revenue at all.â€
Report by David Wilkening
David
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